KEEP UP TO DATE WITH ALL THE IMPORTANT COVID-19 INFORMATIONCOVID-19 RESOURCE PORTAL
FANews
FANews
RELATED CATEGORIES
SUB CATEGORIES General | 

Take-home pay records fastest increase in September 2021

28 October 2021 BankservAfrica

Growth is, however, expected to be short-lived

South African salaries reflected the fastest growth on record as the average take-home pay, before inflation, increased by 13.5% in September 2021, according to the latest data from the BankservAfrica Take-home Pay Index (BTPI). However, this momentum is likely to be short-lived.

“The nominalised average salary was R15 794 in September 2021, one of the highest on record and in years,” says Shergeran Naidoo, BankservAfrica’s Head of Stakeholder Engagements. “In real terms, the average salary was R13 047, representing a substantial growth of 8.3% year-on-year.”

The surprising growth observed in the monthly BTPI can be owed to these factors:

• Salary adjustments for civil servants
The latest salary data held over 800 000 extra payments*, mostly from government departments. These reflect the delayed implementation of the Public Service Co-ordinating Bargaining Council’s salary adjustment for civil servants for a cash allowance that is payable back dated from 1 April 2021 to 31 March 2022, according to its media statement. As these cash allowances back date to April, our data shows 400 000 payments were made for the April – August 2021 period. According to our data, another 400 000 payments were made in September 2021. These contributed 80% of the increase in September’s take-home pay data.

• Overtime pay for July’s unrest
We noted overtime pay were made to the South African Police Service (SAPS) and the South African National Defence Force (SANDF) for their extended duty during July’s unrest, adding almost
R1 billion to the BTPI’s overall salaries. Therefore, the overtime pay pushed up the average take-home pay in the BTPI. Overtime pay on this scale is unlikely to occur any time soon (we may see some overtime pay during the upcoming municipal elections on 1 November 2021 but not to this extent).

• Low take-home pay base in September 2020
Last year, when the economy began recovering, more casual workers gradually returned to the workplace after being affected the most during the worst of the Covid-19 crisis. As a result, the take-home pay in September 2020 reached a low base and the average take-home pay dropped from time to time during 2020.

“All these factors indicate that the average take-home pay will not increase at September's rate in the next month or so,” says Mike Schüssler, Chief Economist at economists.co.za. “The worldwide supply chain issues and the continuing shocks from July’s unrest are likely to constrain economic growth and affect salary increases. We, therefore, expect a downward adjustment for salaries in the coming months.”

Meanwhile, banked private pensions remained strong during September 2021.

“According to the BankservAfrica Private Pensions Index (BPPI), the average private pension in real terms reached a new record to stand at R7 877 and 4.6% higher on a year-on-year basis,” says Naidoo.

Adding to the robustness of the BPPI was the new rule change that allows private pensioners to withdraw all their pension savings once the capital amount is under R270 000. This has prompted pensioners in the lower end of the income spectrum to withdraw their funds and leave the system, according to Schüssler.

Since the rule change for pensioners, the average real pension, still on our system, has increased by over 10%.

Click here to read more...

Quick Polls

QUESTION

Are you shocked by Sasria’s 2022 rate increases, or is it expected given the sheer scale of the July 2021 rioting plus the ongoing increase in frequency and severity of protest losses?

ANSWER

Yes, I am shocked and so will my clients be shocked
No, it was expected
fanews magazine
FAnews November 2021 Get the latest issue of FAnews

This month's headlines

New proposals to amend PPRs have major impact
The untold truth about intermediary agreements
Rethinking claims
Tik-Tok: The clock is ticking on SA’s R45 billion unclaimed benefits bomb
Medical schemes’ average increases for 2022
Disability claims aggregation
Subscribe now